Audley Shaw

Shaw’s abundance of riches

October 4, 2017 by IC Insider.com

Minister of Finance Audley Shaw rolling in increased taxes.

Minister Shaw gave up $10 billion in payroll taxes last fiscal year and an estimated $13 billion again this fiscal year, but he ended up with a surplus of $11 billion for the year to March this year.
The GOJ approved increased spending in the second half of the year by $10 billion but still ended the year underspending the amounts allocated to be spent by $5 billion.
After a mere 5 months of the current fiscal year to August, the Minister of Finance has amassed a tidy $14.6 billion more than forecast for the government coffers.
According to data released by the Ministry of Finance, tax revenues are $11 billion higher than originally forecasted, thanks to 37 percent surge in corporate profit taxes, that added nearly $6 billion to the surplus, and $9 billion from indirect taxes, mainly local GCT and special consumption taxes.
Government operations (GOJ) raked in a small surplus for August, pushing the year to date surplus to $5.6 billion, after capital inflows of $11.4 billion, that was originally included in the budgeted forecast. The net position on GOJ operations, is $21.5 billion better than planned and pushed the primary surplus to $52 billion or $19.5 billion better than planned.
Interest cost ended $2 billion lower than projected and should enjoy even lower cost, going forward, with the recent cut in Treasury bill rates, by over 50 basis points.
GOJ revenues inflows have been extremely buoyant since the drop in budgeted inflows for the fiscal year to March 2015. While 2015 fiscal year came up short of budget by $16 billion with revenues at $412 billion, 2016 came in with $50 billion more than the out turn for 2015, at $456 billion and 2017 with total revenues of $514 billion, was $52 billion more than for 2016.

Filed Under: Economy, Feature Stories Tagged With: Audley Shaw, GOJ fiscal operations

GOJ runs at surplus for fiscal Q1

July 31, 2017 by IC Insider.com

Minister of Finance Audley Shaw carried on from where Phillips left off.

An increase of $7.76 billion in revenues and grants and $1.5 billion fall in expense payments resulted in Government of Jamaica running the country’s finances at a surplus for the 3 months to June, this year.
The surplus of $1.6 billion is $9.3 billion better than the deficit projected at $7.67 billion.
The cost of interest fell $3 billion below forecast to end at $29 billion versus projections of $32 billion. Company profit tax delivered $2.76 billion more revenue than the $8.4 billion forecasted but PAYE brought in $952 million less than the $13.9 billion budgeted. Production and consumption taxes brought in $4.3 billion more than the $41.4 billion planned but imports delivered $478 million less than the $43.96 billion projected, due mainly to a drop of $2.5 billion in Special Consumption tax.
The primary surplus set at $24.4 billion is now at $30.6 billion. Although, the fiscal is running at a surplus ahead of forecast the government borrowed $5.5 billion more than planned and pay back $6 billion less than originally projected.

Filed Under: Economy, Feature Stories Tagged With: Audley Shaw, Jamaica Government fiscal, PAYE, Special Consumption Tax

Tax break costing far less in year 1

January 3, 2017 by IC Insider.com

Minister of Finance Audley Shaw who announced tax break for individuals.

Minister Audley Shaw announced in May last year, an across the board threshold for individual tax payers of just over $1 million per year, effective July 2016, estimated to cost $12 billion in lost revenues this fiscal year. Data in Governments’ fiscal operations to November this year, is now showing that the cost will be far less than originally stated.
According to the inflows of PAYE, the difference between inflows for 2015 amounted to $46 billion to November is only $3 billion more than the intake of $43 billion for the same period in 2016. Revenues lost monthly, since August, the first month that revenues would be affected by the lower tax payments is now running around $1.2 billion lower than in 2015, suggesting that the full impact for the current fiscal year will end up costing $9 billion instead of the $12.5 billion originally stated. The cost for a full year would be in the order of $14 billion.
According to Shaw, 251,000 persons would have benefit from the increased threshold. Revenues for Government of Jamaica fiscal operations to the end of November 2016 are $26 billion ahead of the similar period in 2015. For the current fiscal year, revenues are $13.8 billion ahead of forecast an amount that has already exceeded the amount forgone in income tax.

Filed Under: Economy, Feature Stories Tagged With: Audley Shaw, Jamaica Government, Tax break

GOJ revenues $26B ahead of 2015

January 3, 2017 by IC Insider.com

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Minister of Finance Audley Shaw pulling in revenues ahead of target.

Revenues for Government of Jamaica fiscal operations to the end of November 2016 are $26 billion ahead of the similar period in 2015.
For the current fiscal year revenues are $13.8 billion ahead of forecast with nearly $5 billion of the surplus coming in November. Intake for the 8 months to November, came in at $304 billion compared with forecast of $290 billion. In May, Minister of Finance announced tax increases of just less than $14 billion that would mostly take full effect at the start of June, with some from mid-May. Revenues from the new measures to November, would be approximately $10 billion with $4 billion to be collected for the other 4 months of the fiscal year.
While revenues are ahead of forecast expenditure are lower than projected. Total expenditure are running $10.5 billion below target to November, of this amount capital expenditure is running $8 below target. Wages are $3.8 billion short of budget while interest cost is above target by $900 million.
Overall operations incurred a deficit of $11 billion compared with projection of a deficit of $26.6 billion leading to the primary surplus ending $25 billion better that forecast at $$63.6 billion.

Filed Under: Economy, Feature Stories Tagged With: Audley Shaw, GOJ budget, GOJ fiscal deficit, GOJ primary surplus, GOJ reveenues

Shaw’s tax-take jumps sharply

October 3, 2016 by IC Insider.com

Minister of Finance Audley Shaw is raking in a big up tick in revenues to August ahead of forecast.

Excluding divestment proceeds of nearly $15 billion government revenues from taxes, fees and grants are ahead of budget by $13 billion to August this year and are ahead of the same period in 2015, by 18 percent or $20 billion.
The big increase over 2015, includes very little new taxes imposed in the budget presentation in May, this year. The increase over 2016 fiscal year annualises out at $48 billion and $60 billion when the new taxes are included. Compared to budget, revenues are running at $31 billion ahead of forecast on an annualised basis.
It means that Minister Shaw has fully funded the revenues given up by increasing the PAYE tax threshold, well ahead of the year-end and just around the time the reduced PAYE taxation takes effect to affect tax revenues with August being the first month that the reduced payment would be effected. PAYE enjoyed inflows of $1.9 billion more than planned, bringing in $29 billion to August. In 2015 for the same period, a total of $28.45 was generated from this item.

Collector of Taxes office, Constant Spring, Kingston.

While revenues climbed sharply, expenditure so far is well below forecast by $13.8 billion. Employees’ compensation is down by $2.7 billion, interest cost shaved $2.5 billion off forecast, capital spend so far, is under spent by $7 billion and other expenses are down by $2.5 billion. The net effect higher revenues and reduced cost is a reduction of the fiscal deficit that was projected at $46.2 billion and ended at $19.5 billion, $26.7 billion less than planned. The primary surplus is running well ahead of plan with an out turn of $41.65 billion up from $17.5 billion budgeted.

Filed Under: Economy, Feature Stories Tagged With: Audley Shaw, GOJ budget, GOJ tax revenues

Expansion for Paramount

August 15, 2016 by IC Insider.com

PTL Lub Grnd bking Allegheny Petroleum and junior market listed company, Paramount Trading joined forces to establish their jointly owned lubricant plant to be housed at 39 Waltham Park Road the same site as Paramount other operating facility.
The plant for which ground was broken in July, is expected to replace imports amounting to approximately US$4 million now being supplied directly by Allegheny Petroleum, according to Hugh Graham, Managing director of Paramount.
Establishing operations in Jamaica, adds more value and will allow for a greater customer reach and create greater margins than that which applies to imports. The initial investment is US$4 million and includes the warehouse, equipment, software and lab testing equipment. The venture will have the capability to test lubricants in use for customers in Jamaica rather having to send samples overseas for testing. There are plans to expand product range in the future and provide products for exports. The plant is expected to start production in January next, Graham confirmed with IC Insider.
According to Graham in 2012, when they listed on the junior market, Paramount had 36 workers and now has 76 employees and the number will increase to 100 employees, with the latest expansion.
The ground breaking ceremony was addressed by Minister of Finance, Audley Shaw, who indicated that this venture vindicated the decision of the government to provide the tax incentive for the junior market as well as the economic policies being pursued that is geared to encourage more production of goods in Jamaica as opposed to relying on direct imports.
Robin Levy, assistant general manager of the Jamaica Stock Exchange indicated that the company has done well since it has listed and said “since listing in 2012 the company has gone on record higher revenues and tripled profit with the stock price rising from $2.45 to just under $11.” Since the ground breaking, the stock traded at $11.50 and now has a bid at $12.
In the year to May, the company posted an 18.5 percent increase in profit, to reach $173 million, from sales revenues of $1.02 billion with other income accounting for $39 million for the year, up from $869 million versus $16 million in 2015, respectively. Administrative, selling & distribution cost rose sharply by 34 percent to $181 million as the wage bill and rental expenses grew appreciably.
PTL All buid While profit grew in the year, segment results show mix out turn for each division. For 2016, Chemicals grew revenues by 12 percent and gross profit by 19 percent over 2015, for Construction and Adhesives, for the same periods, revenues grew by 59 percent and gross profit by just 6 percent. Manufacturing sales fell by 16 percent with profits remaining unchanged, while Transport enjoyed a 16 percent growth in sales leading to a 61 percent rise in profit and Lubricants sales climbed 403 percent with profits jumping 127 percent. Graham indicated to IC Insider that the fall in manufacturing sales is due to a customer reorganising their business. The data suggests that the new lubricant plant is likely to be the area of growth for Paramount.
In 2015, Graham indicated that a rights issue was likely, asked about that source of funding for the expansion, Graham stated “I can’t talk about that now,” he however, stated that “some other revenue announcement should be made soon.”

Filed Under: Buy Rated, Company News, Company Results Tagged With: Allegheny Petroleum, Audley Shaw, Jamaica Stock Exchange, Paramount Trading

$1.275m threshold for all

May 12, 2016 by IC Insider.com

Minister of Finance Audley Shaw

Minister Audley Shaw, announced an across the board threshold for individual tax payer of $1.275 million, effective July 1 this year, and to move it to $1.5 million, starting April 2017.
Shaw stated that 251,000 persons will benefit from the plan which is said to cost $12 billion in this fiscal year. The Minister announced a series of tax measures to fill the gap caused by the shortfall arising from the tax plan. Taxes will go up on cigarettes, petrol, heavy fuel, LNG and departure tax.
Tax payers earning over $6 million per annum will pay taxes above the threshold at 30 percent instead of the current 25 percent.
The Minister stated that the plan is to move from direct taxation to indirect taxation with the expectation to fully phase out personal tax.
Shaw presentation place a great deal of focus on growth and development, including focus on improved infrastructure including extension of the south coast highway to Negril.
The minister projected economic growth at 1.8 percent for the fiscal year up from 0.8 percent for the 2015/16 fiscal year. The Minister also stated the drive for comprehensive tax reform to be pursued.

Filed Under: Breaking News, Feature Stories Tagged With: Audley Shaw, Taxes

$1m for 2016, $1.5m in 2017

May 12, 2016 by IC Insider.com

Minister of Finance Audley Shaw should announce a $1m plan for 2016 and $1.5m for 2017 in his budget presentation today.

The promise by the JLP to make earnings of PAYE individuals up $1.5 million, tax free has undergone much discussions as to the feasibility for it to be funded. Few commentaries have focused on the growing revenues of the government and the reality that revenues tend to increase in line with nominal GDP growth.
At the same time, interest cost on the government debt, will decline as interest rates fall, notwithstanding the increased amount in the budget this time around for interest. The increase is to accommodate the interest on the Petrocaribe Fund debt which will be recovered from the Fund.
Interestingly, former Prime Minister Bruce Golding and an active participant in the 2016 election campaign for the JLP gave a speech in April in which he suggested that the implementation should be done to maintain simplicity and equity in the system. He made two proposals. The more important one was for an across the board threshold of $1 million. It would appear that Golding was testing the waters for a modification in the $1.5 million plan at least initially, that would have affected only some on the PAYE system.
Jamaicans should get the news that for 2016 the PAYE threshold will be $1 million, with it going to $1.5 million during 2017. It is unclear if the $1.5 million will be across the board or not. But with tax reform to be implemented probably in 2017, it seems as if it will be an across the board threshold.